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Columbus voices fears at equity managers' underperformance
Firm's investment director says star and active managers hit by underperformance against the benchmark
More star UK equity managers are underperforming than at any time since the start of the last bull market, according to HFM Columbus Asset Management.
Rob Pemberton, investment director at HFM Columbus, said the market dip had hit leading lights in the UK All Companies and UK Equity Income sectors.
He picked out Stephen Whittaker's £495m New Star UK Growth fund, Carl Stick's £170.3m Rathbone Special Situations fund, Toby Thompson's £259.4m New Star Equity Income fund and Bill Mott's £321m PSigma Income fund as examples.
UK Growth lost 36.5 per cent and UK Special Situations 35.6 per cent for the year to the end of June against a UK All Companies average decline of 19.3 per cent, according to Morningstar. The portfolios finished 316th and 315th, respectively, out of 316 funds in the sector.
In UK Equity Income, the New Star Equity Income fell by 27.4 per cent and the PSigma Income 23 per cent against a peer group average of 19.3 per cent. The vehicles came 81st and 72nd, respectively, out of 88.
Mr Pemberton said star managers were not the only ones to suffer from underperformance against the benchmark.
He said:"Active managers always make a big thing of outperformance in bear markets, but that hasn't proved to be the case. All the major sector averages are behind the index."
The crisis hit noted value players particularly hard, he added.
He said: "Growth stocks have done very well, and value stocks have done very poorly. But it's difficult to say growth funds have done well because the market has played to their strengths. The ones I rate tend to do well over all cycles."
The director cited Mark Lyttleton as a top performer over the last year, and not only with respect to the £864.9m BlackRock UK Absolute Alpha fund he co-manages with Nick Osborne.
He drew attention to the 0.4 per cent gains he made over one year in his £1.6bn BlackRock UK Dynamic vehicle, which came fifth in the UK All Companies. Mr Lyttleton also lost just 3.9 per cent in the 12th-placed £497.8m Black Rock UK.
Mr Pemberton added Robin Geffen had demonstrated he could make his target yield in the £672.6m Neptune Income without investing in financials. But he pointed out that not all UK equity managers had achieved the same results.
He said: "Clients are generally more forgiving in a bull market. Managers might say, 'I'm not at the top because I've been more cautious, but I've still made you a lot of money'."
"Some reputations have been battered to the extent they may take a long time to recover. These funds have grown, and the investing public is exposed to those names."
